Decided on July 20,1961



- (1.) THIS is an application for the issue of a writ in the nature of certiorari quashing and/or setting aside the order made by the Additional Collector of Customs, Calcutta, by which he has proceeded under section 167 (8) of the Sea Customs Act read with section 23a of the Foreign Exchange Regulation Act, and has ordered the confiscation of 23 bars of gold mentioned in the said order, and has also imposed a personal penalty of Rs. 20,000/- on the petitioner. The facts in this case are disputed. The case made by the respondent is as follows: Sometime in August, 1958 an information was received by the Detective Department of the Calcutta Police that two Indian nationals, by the name of Sitaram Agarwala and Bholanath Gupta were going to purchase a quantity of Chinese smuggled gold. On the 25th August, 1958 a constable shadowed these two persons when they made a journey by a public bus and took up their position on the western portion of Jatindra Mohan Avenue, near the Kali temple. After sometime, a baby taxi passed by, that spot, and upon a signal being given, it was stopped and the petitioner, whose name was later on learnt to be Wong Chit Khaw alighted from the taxi and shook hands with them. Thereafter, all of them boarded the taxi, and when the constable challenged them and raised an alarm, the petitioner slipped out of the taxi and ran away along Raja Nabakissan Street He was, however, chased by members of the public and while he was running away he kept dropping certain packets on the road. Three packets were picked up and handed over to the police. They were found to contain 23 bars of gold with Chinese marks of origin. The petitioner was eventually apprehended by a traffic police sergeant at the junction of Raja Nabakissen Street and B. K. Pal Avenue, and was taken to the Shyampukun Police Station. The petitioner refused to sign the seizure list and disowned the gold bars. On a search of his person, he was found to wear a specially made cotton jacket having six pockets underneath his shirt, presumably for carrying the contraband gold. The two Indian nationals had a sum of Rs. 49,320/- on their person.
(2.) ON the same day, the petitioner made a statement before the Customs Officer, a copy whereof is annexed to the affidavit of Ramesh Chandra Misra affirmed on 8th April. 1960. In this statement, he has confessed that he was a Chinese national. According to him in the morning two persons came to his house, whom he knew for sometime, and asked him to carry some gold for them in a taxi to the temple in the centre of Chittaranjan Avenue beyond Grey Street and to deliver it to two Indians who would be waiting for it and who would pay him in Indian currency, which he was to bring back to them. He said that this was the operation which he carried out, and during which, he was apprehended by the police. He confessed that he got out of the taxi and was trying to run away, when the crowd started running after him. He took out some gold bars from the packets and started to throw them away on the road. He said that he was unable to give the names or addresses of the two persons who came to his house and handed him the gold and asked him to carry out the operation. In the present petition, he states that he was walking along the B. K. Pal Avenue, Calcutta, on the 25th August, 1958 when he was arrested by the police on the allegation that he was in possession of and was attempting to sell foreign gold or gold bars which were alleged to be smuggled. He says that after he was arrested he was taken to the Shyampukur Police Station where he saw for the first time two other persons whom he later on came to know as Sitaram Agarwalla and Bholanath Gupta. It was then that he came to know that he was being charged with possessing smuggled gold numbering 23 bars, and valued at about Rs. 40,000/- which he was attempting to sell to the said two persons. He says that he at once categorically denied the charge and on the 26th August, 1958 he was produced before the learned Chief Presidency Magistrate and ultimately enlarged on bail. He says that on the 9th October, 1958 the respondent No. 2 by letter No. S12 (IV)T 55058p issued a show-cause notice, a copy of which is annexed to the petition and marked with the letter "a". It is then stated that on or about 12th October, 1958 the petitioner showed cause denying the allegations. In December, 1958 the opposite party No. 2 filed a petition of complaint under section 167 (8) of the Sea Customs Act against the petitioner, the said Sitaram Agarwalla and Bholanath Gupta, before the learned Chief Presidency Magistrate, Calcutta. On the 30th May, 1959 the learned Presidency Magistrate, 5th Court, Calcutta, to whom the case was transferred, found the petitioner and Sitaram Agarwalla guilty of the offence under section 167 (8) of the Sea Customs Act and sentenced the petitioner to suffer rigorous imprisonment for three months and to pay a fine of Rs. 1000/-, in default to undergo rigorous imprisonment for three months more. The petitioner thereupon moved the High Court by way of appeal which is still pending. He says that all of a sudden, he was served with Order No. 175 dated 12th November, 1958 by which he was found guilty of an offence under section 167 (8) of the Sea Customs Act read with section 23a of the Foreign Exchange Regulations Act. By the said order, the gold which the petitioner disowned, was confiscated and a personal penalty of Rs. 20,000/- was imposed upon him although this was quite foreign to the notice to show cause served upon him. He says that although he had given a written, explanation, the order was made without [hearing him. The copy of the order complained of, as made by the Additional Collector of Customs, is annexure "c" to the petition. It is against this order that this application is directed.
(3.) UPON going into the materials [placed before me, the first thing that appears is that the petitioner is guilty of gross suppression of facts from the Court. As will appear from the summary given above, the petitioner has stated that a notice No. S12 (IV/t)55/58p was issued to him, whereupon he showed cause and the matter was disposed of without a hearing. A copy of this notice is annexed to the petition. The facts, however, are entirely different. On the 9th October, 1958 two notices were issued to the petitioner. One is numbered as above, being a notice under the Foreign Exchange Regulations Act. The facts are stated in the said notice and the charge is that the petitioner was engaged in the smuggling of Chinese gold and was attempting to sell the same. It was stated that the bringing of the gold into India was prohibited except under a permit, and under section 23a of the said Act, the petitioner was asked to produce the permit or authority issued by the Central Government or the Reserve Bank of India authorizing him to import 23 bars of gold mentioned above failing which, a prosecution would be lodged against him in a court of law, under section 23 (1) read with section 8 (1) of the Foreign Exchange Regulations Act, 1947. In his notice, there is no mention of the Sea Customs Act and the petitioner was not asked to show cause why the gold should not be confiscated and why a personal penalty should not be imposed upon him. That is the subject matter of the second notice, which was issued to the petitioner on the same day, being show-cause memo No. S12 (W/t) 55/58p dated 9-10-58. It is in this show-cause notice that the petitioner was asked to show cause why the gold should not be confiscated and a personal penalty should not be imposed upon the petitioner. He was asked to show cause and to indicate whether he wanted a personal hearing. He gave an answer which is annexure 'b' to the petition. That answer itself shows that he had received both these notices. He has, however, disclosed only one notice and completely suppressed the other from his petition. He never asked for a personal hearing, or for any opportunity for producing witnesses. The explanation given by the petitioner is a short one and merely states that he was wrongly arrested, evidently on mistaken identity, or at the instance of some scheming persons who were out to safeguard their own interests at the cost of an innocent person namely, the petitioner. He repudiated the allegation against him regarding importation or possession and/or the attempt to sell foreign gold or gold bars. He says that the whole story was a fabrication, and was based on falsehood. He denied having made any statement before any Customs Officer. Next, it is also untrue that he was charged or found guilty of an offence under section 167 (8) by the learned Presidency Magistrate. The complaint and the charge was under section 167 (81) of the said Act. The suggestion that, after having received the said notice he was suddenly served with the Order No. 175 dated 12th November, 1958 which is the order complained of, is also untrue. Before the order was made, he had been served with a show cause notice, to which he gave an explanation and did not claim any personal hearing. Indeed, Mr. Dutt on behalf of the petitioner opened his case by stressing the fact that his client was found guilty of charges, not to be found in the show-cause notice. It was then that Mr. Kar produced the second notice. In my opinion, there has been such gross-suppression of facts in the petition, that it is sufficient to throw out the application on that ground alone. It is an established principle that in an application under Art. 226 of the Constitution, the petitioner must disclose all facts known to him, and failure to disclose any relevant fact makes the application liable to be dismissed in limine. It will be remembered that on the strength of this petition, an interim stay had been obtained. Although this is sufficient to dispose of this application, I shall also deal with the merits. Mr. Dutt appearing on behalf of the petitioner has taken the following point: He says that section 167 (8) of the Sea Customs Act deals with the importation or exportation of goods which was for the time being prohibited or restricted by or under Chapter IV of the Sea Customs Act, contrary to such prohibition or restriction. If there was such an importation, the goods shall be liable to confiscation and any person concerned in any such offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding 1000 rupees. Mr. Dutt argues that on the facts of this case the petitioner could not be said to be a 'person concerned' in the importation of the goods, although he may be concerned in an attempt to sell the same. Therefore, the personal penalty under section 167 (8) cannot be imposed. Now, this very same case was dealt with by Mitter, J. , in Sitaram Agarwalla v. Additional Collector of Customs, Calcutta, (1) A. I. R. (1960) Cal. 676. A show-cause notice, similar to the one served on the petitioner, had been served on Sitaram Agarwalla as well and a personal penalty of Rs. 60,000/-was imposed upon him and the currency notes of Rs. 49,290/- were appropriated towards the same, by the Assistant Collector of Customs and Superintendent, Preventive Service. Sitaram Agarwalla thereupon made an application under Art. 226, and this was the matter which was dealt with by the learned Judge. After considering the facts of the case and the law, the learned Judge came to the conclusion that it had not been shown that the petitioner, Sitaram Agarwalla was a 'person concerned' with the importation of the gold, which was alleged to be smuggled. He relied on a Madras; decision, and has come to the conclusion that in order to come within the mischief of section 167 (8), it must be shown that the person charged was actually connected with the illegal importation of the gold. Once the importation was complete, then any subsequent dealing with it can not come within the ambit of item (8) in the Schedule to section. 167 of the Sea Customs Act. The rule was therefore made absolute and the order of the Additional Collector of Customs was quashed. Now we have this application, in which I have to deal with the case of the petitioner. The same arguments that were advanced on behalf of Sitaram Agarwalla are being advanced here. Mr. Dutt has not specifically argued before me that the petitioner was not heard before making the order. However, there does not appear to be anything in this point, because the petitioner was told that if he wanted a personal hearing he should ask for it but he never did so. Before dealing with the question further, I would like to indicate shortly the legal position. It appears that by now, not only this High Court, but also the High Courts of Bombay and Madras have concurred in holding that the scope of section 167 (8) of the Sea Customs Act is a limited one. Section 167 (8) specifically deal with the importation or exportation of any goods, which is for the time being prohibited or restricted, contrary to such prohibition or restriction. When goods are imported, contrary to such prohibition, then an offence is committed. Gold is an article, the importation of which without a permit, is prohibited. If such goods are apprehended, then two consequences ensue. As has been pointed out in Sewpujanrai Indrasanrai Ltd. v. Collector of Customs (2) (1958) S. C. A. 916, in such a case if the goods are apprehended and even if the offender, namely the person who imported the same, is not known, there is a right in rem of confiscating the goods wherever it is found. Where, however, the offender is known, by which is meant the person importing the goods or any person concerned with such importation, then all such persons are liable in personal, and against them there can be imposed a personal penalty. So far as the goods are concerned, in this case the petitioner does not claim the same. He was, however, in possession thereof at one time, and under section 178a of the Sea Customs Act the onus lay upon him to show that they were not smuggled goods. He has failed to discharge the onus. We have to assume therefore, that 23 bars of gold, bearing; Chinese markings, had been imported, to India without a permit, and it was: at the material time in the possession of the petitioner, who himself is a Chinese national. The principle that has been adumbrated in the various decisions, shows that a person, who is concerned with the importation can be made liable, but once the importation is complete, any further operation in respect thereof inside India. , unless it can be connected with the; act of importation, can not be said to come within the mischief of section 167 (8 ). I have already mentioned the Calcutta decision. I shall now deal with the other decisions. The: matter was considered by the Madras High Court in Messrs. Devichand Jestimall and Co. , Bangalore v. The Collector of Central Excise, Madras, (3) A. I. R. (1960) Madras 281. The fact in that case were as follows: On receipt of certain information, the; Superintendent of Central Excise, Vellore, searched the shop and residence of Messrs. Venechand and Sons, and inter alia seized certain bars of gold with foreign marks. This firm stated that they had purchased the gold from a certain party in Bangalore. Against this Bangalore party, proceedings were drawn up and penalties were imposed under section 167 (8), on the ground that he was concerned with the illegal importation of the gold. Thereupon, he made an application to the Madras High Court. It was held that, to bring the petitioner within the terms of section 167 (8) of the Sea Customs Act, it was necessary to establish that either he actually imported gold, or was concerned with the import thereof. It must be shown that he arranged for the import of the gold or abetted the import of the gold or received it immediately after the import, receipt being the final step in the process of importation. In other words, it must be proved that the applicant has either actually committed the offence of importation, or has been an accessory to it, either before the fact or after the fact. To be in possession of the gold, or to sell the gold, or to buy the gold, once the process of importation, assuming the importation to be unlawful, is completed, and independently of the series of acts connected with such importation, will not fall within the terms of item 8 of sec. 167. Mere possession of gold, which has been unlawfully imported into India, cannot be dealt with under item 8 of the Schedule to section 167. It was held that there was no evidence that the petitioner had imported the gold or was concerned with the importation. The order imposing the personal penalty was, therefore, quashed. The same conclusion was arrived at in the Bombay case, Gopal Mayaji Parab and anr. v. T. C. Seth and anr. (4) A. I. R. (1960) Bom. 478. The facts in that case were as follows: One Shankarlal, was in possession of two slabs of gold, which were smuggled into India. It was arranged on behalf of Shankarlal that these two slabs of gold should be melted at the shop of one of the petitioners, who carried on the business of running a metal melting workshop at Bombay. Shankarlal delivered the two slabs to the second petitioner, who brought the same to the shop of the first petitioner. While the two slabs were about to be melted, the same was seized under a search warrant, and later on proceedings were drawn up. The petitioners were made liable to a penalty imposed under section 167 (8) of the Sea Customs Act, as being the persons concerned with the illegal importation of the goods. Desai J. , said as follows:- "in connection with the construction of the words 'person concerned', Mr. Joshi has relied upon the decision in the case of Attorney-General v. Robson, (1850) 20 L J. Ex. 188. On the facts and the construction of the statute in question in that case it was held that the words 'otherwise concerned' mean having any interest whatever in the matter. The words of the Statute in that case were much more wider and are not apposite to the phraseology of S. 167 (8 ). Even if the construction to be applied in the present case was that 'person concerned' meant 'person having any interest whatever in the matter' that meaning would have to be applied to the matter of the smuggling of the two slabs of gold in question. The offence of smuggling in my view became complete at the period of time when the gold was imported into India contrary to prohibition and restriction and the subsequent attempt to destroy the evidence that the gold was of foreign origin cannot make the petitioners persons having interest in the matter of smuggling of this gold. ";

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